Questions tagged [currency]

a generally accepted form of money, including coins and paper notes , which is issued by a government and circulated within an economy.

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2answers
99 views

Can the major indice of an exporting nation decrease at the same time the currency devalues?

In the UK, the FTSE100 is achieving record highs at the same time the currency (GBP) is depreciating rapidly. The media often correlate the two events by reporting that since the indice is made of ...
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1answer
235 views

What do the numbers in the ISO 4217 currency codes mean?

The International Organization for Standards (ISO) has a ISO 4217, which delineates currency codes, country codes, etc. for, well, international currency. Alongside this, each country is given a ...
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1answer
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Forecasting future currency exposures

I have a data set (about 60 observations for each variable) for monthly operating income for a Japanese company denoted in EUR, USD, and JPY, and their respective currencies. I believe there is linear ...
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647 views

What made The Wörgl Experiment successful?

Background: In 1932, in the midst of the Great Depression, the small town of Wörgl in Austria successfully experimented with its own local currency (in the form of a stamp scrip) ... They not only ...
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Why was there a sudden rise in trade-weighted US dollar value in 2014-2015?

I was trawling the web and happened upon this graph: https://fred.stlouisfed.org/series/DTWEXM . The value of the trade-weighted US dollar was going steady until 2014-2015, rose rapidly, then it sort ...
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Currency Denominations Affecting Prices

My question regards how currency denominations might artificially affect prices. For example, a baseball game that determines a good pricing scheme for parking would be charging 7 dollars per person. ...
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47 views

What's the equation of currency fluctuation?

Preamble: Today the rate of EUR is 82.09 in BDT ( Bangladeshi Currency) and two hours later it's 82.50 ( I hope, it's increasing). But why does this fluctuation just keeps happening? Looks like the ...
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1answer
124 views

Does a strong dollar achieve the same tightening effect on the economy as rising interest rates?

Rising interest rates means the cost of borrowing USD goes up. A stronger USD means USD becomes more expensive. Wouldn't that naturally follows that the cost of borrowing USD goes up since each dollar ...
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1answer
112 views

Value of ruble in year 1825

Would anyone know how to find out the value of the Russian ruble in the year 1825, in today's (2016) US dollars?
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Do the stock performances of various companies have a measurable correlation with exchange rate?

For example if the values of big companies in a country decrease, will the value of that country's currency measurably decrease?
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1answer
181 views

Conversion of GDP PPP International \$ 2005 into GDP PPP International \$ 2011

Essentially I have two different datasets that I'm trying to consolidate. One set of data comes from the World Bank Databank, and is a set of historical GDP PPP values for all countries expressed in ...
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69 views

How does foreign exchange settlement work?

How does the settlement of trades in foreign exchange work? For example, if I am a large company with money in dollars and I buy another currency like Deutschmarks with my dollars, how does the money ...
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1answer
67 views

Given fractional banking and the multiplier effect, for every dollar in circulation, how many dollars in spendable money exist?

The fractional banking system, in a nutshell, allows banks to invest the money deposited in them, and then for whoever ends up with that invested money to deposit the money back into the bank, which ...
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1answer
77 views

How do currency traders resolve imbalances in the demand for different currencies?

Countries trade different amounts of goods that are inherently imbalanced. How do currency traders resolve these imbalances in the demand for different currencies? For example.... Imagine we have two ...
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1answer
367 views

What effect would destroying large amounts of physical currency have on government finances

India has recently recalled high denomination notes and asked people to deposit the physical currency in old notes in their bank accounts. People who have unaccounted wealth are resorting to ...
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How is the banknote denomination designed?

Recently India demonetized their 500 and 1000 rupee notes. As a replacement a new 2000 rupee note was introduced. This has resulted in some chaos in the commercial markets due to decreased ...
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1answer
21 views

How will the value of the pound affect the British economy?

Given the recent massive decrease in the value of the pound, does this not equally devalue the British economy by a similar amount? Why does that not lead to an immediate large crash in Britain as ...
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1answer
124 views

Why switch from Gold to Fiat

If I'm not mistaken, gold was used in early days of USA. Why did we switch to fiat, i.e dollar bills. Originally they were backed by gold, so why not keep gold? I'm just trying to understand basics ...
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112 views

What is a bilateral currency swap line? [closed]

Please explain in simple terms. How exactly does it function?
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1answer
327 views

How does Egypt prevent people from arbitraging their currency?

Apparently Egypt uses a fixed exchange rate so there is a substantial difference between the government rate for the Egyptian pound and the price on the street. What prevents someone from just buying ...
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Gold coins as currency?

My question is about gold standard. But not the version I always see mentioned (trading bills for gold at a set price). I mean having gold coins in circulation. For example, new currency consists ...
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2answers
756 views

Uncovered Interest Parity question

I am trying to understand the fact that, given that the uncovered interest parity holds, a rise in dollar interest rates will cause the dollar to appreciate. Is this a good intuition? Uncovered ...
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1answer
98 views

Currency triplets - arbitrage opportunity?

I have three currency pairs - USDEUR - 0.88, USDINR - 67.13 and EURINR - 75.88 , so simple math tells me that EURINR should be USDINR/USDEUR = 76.28 ...this is a fairly significant deviation from an ...
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3answers
17k views

What is the relationship between inflation and imports/exports?

According to the aggregate demand curve, when the price level is higher, the real GDP demanded is lower. One of the explanations given is a consequence of the Mundell-Fleming model: "As the price ...
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The Currency Value

On what basis, The value of any currency changes: Does it depend on re-paying the loans. Or it depends on trade & exporting. (e.g. The "Dollar" equals 13 Egyptian pounds... What's the reason? Is ...
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324 views

because bitcoins do not generate earnings, then (it is a ponzi scheme)?

What does the author mean with: Since Bitcoins do not generate any actual earnings, they must appreciate in value to ensure that people are willing to hold them. Why must they appreciate in ...
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69 views

What may have caused these blips in the value of Euro vs. US dollar

I was looking at the USD/EUR exchange rates a few minutes ago (Saturday evening, Eastern Time Zone here in USA) at xe.com and noticed some sharp blips on it from earlier today. The graph looked as ...
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In a trade imbalance does the importing country's currency become more valuable?

Suppose that country A buys freely from country B, but B uses steep tarriffs to block its citizens from buying from A. In that case country A's currency will pile up in B. Other things being equal, ...
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Why do currencies cover orders of magnitude?

Using 1 USD as a reference, most currencies are within an order of 5 away from the USD: that is, one unit of most currencies is worth between 0.2 USD and 5 USD. (Source.) In fact, most European ...
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341 views

Financial Smart Contract on Ethereum: can an Ether Futures contract be priced in Ether?

BACKGROUND This is more in the wheel-house of economics than programming, but after a few different titles, I thought it best not to skirt around the root of my question OR create a oddly phrased USD ...
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2answers
870 views

How will the Brexit affect the Euro and the Pound?

The question is the title: How will the brexit affect the euro and the pound? It looks like GBP is facing a tough situation. It is at its lowest value since 1985. Has GBP dropped permanently(or for a ...
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1answer
3k views

What is the list of countries where the central bank prints money?

Is there a list of the countries where the central bank is creating money, today ? How much ? We know for: EUR: Euro countries (since ECB QEs) (and euro-bound countries as DKK ?) YEN: Japan (BOJ '...
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23 views

How is the choice of banknote denominations made?

I'm not sure which SE network this question belongs to, but this seems to be the most appropriate one. What determines the choice of banknote denominations? Obviously, the first factor is the ...
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3answers
408 views

Is there a good way of assessing an estimated absolute value of a currency?

If we want to figure out the strength of a currency relative to another currency, we look at the exchange rate between the two. However, I'm wondering what is the most accurate way of assessing the ...
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1answer
419 views

Who gets newly printed currency?

The central bank of a country is responsible of the printing of new currency notes and coins/ money to the economy of a country. My question is how they introduce this new money into the economy in a '...
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Russian ruble drop in value due to low oil prices

http://www.americanactionforum.org/research/impact-falling-oil-prices-russian-financing/ Based on the above article, the author states that "For budgeting, this favors the oil exporter, because a ...
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427 views

Questions on comparing GDP between various countries

What is the difference between OER vs PPP? What fundamentally drives them? Shouldnt an arb opportunity exist and wouldnt that difference then go away? My understanding of OER is the official nominal ...
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1answer
94 views

Why would Switzerland, with its export-driven economy, worry about weakening against the dollar?

I was reading about the SNB's decision to abandon the peg in 2015, and among the various articles I read, one from CNBC quoted the SNB president saying the following "The euro has depreciated ...
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1answer
52 views

Which currency is preferred when countries with different currencies purchase imports/sell exports?

For example, when a company in the United States sells goods to a company or distributor in China, does the U.S. company accept payment in yuan (which it then exchanges for dollars on the currency ...
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1answer
363 views

Why is deflation not considered the opposite of inflation?

In this article from 2013 on bitcoin, the author casually states the importance of knowing that "deflation is not the opposite of inflation", without expanding or elaborating. I'm sure that there are ...
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678 views

Why could interest rates go up if Brexit happens?

I was reading this article, George Osborne says Brexit would drive up mortgage rates: George Osborne has issued a stark warning that mortgage rates will rise if Britain leaves the European Union. ...
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In this scenario, which coin is more valuable?

There are two coins, Coin A and Coin B. You can transfer Coin A for Coin B or Coin B for Coin A only in the two following ways: Give 100 Coin A for 10 Coin B Or Give 10 Coin B for 50 Coin A In ...
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504 views

Why currency purchasing power is linked to confidence in central banks

From the New Statesman, http://www.newstatesman.com/politics/economy/2016/02/coming-storm, "Ever since the collapse of the Bretton Woods system of pegged exchange rates in 1971, the sole guarantee ...
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Can a currency with constraints on the amount a person can posses boost the economy?

So there was the following proposition: Create a currency with the following contraints: Each person may only own x amount of this currency. Gaining more of this currency is not allowed. Using a ...
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Why do Higher Interest Rates attract Foreign Investors?

I am reading the following Article at Investopedia which states Generally, higher interest rates increase the value of a given country's currency. The higher interest rates that can be earned ...
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How does the euro swap for Greek debt work?

As I understand it, some portion of the Greek sovereign debt has been converted into "Euro swaps". Can someone explain in simple terms what that means? What debt was given to whom?
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1answer
60 views

Comparing currency prices

If I know that one USD buys 0.90 euros or 1.42 Australian dollars, can I reliably conclude that one Australian dollar buys 0.63 euros? (0.90 / 1.42) That seems to make sense. But would this be true ...
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1k views

Wouldn't abolition of cash give rise to a substitute currency?

Some countries (e.g. Sweden and Denmark) plan to abolish physical cash in the future and restrict the use of cash to electronical deposits. One of the reasons for this is to prevent hoarding / boost ...
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68 views

Smart contracts in Dollars

In last years I have read a lot about "Smart contracts". But I cannot understand why we need bitcoin for this? The old-fashioned US Dollar are not used in Smart Contracts?
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How to make deliberate devaluation or depreciation of a currency?

It is said in Wikipedia, that devaluation can be done as monetary policy act. But HOW this can be done if there is no fixed rate? What are actual tools Central Bank can use? One thing I can imagine ...